Kiffmeister’s #Fintech Daily Digest (20221101)

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.

And FYI Onalytica published a short interview with me that some of you might find interesting. [Read it here]

Hong Kong to Consider Virtual Asset Property Rights, Establish VASP Regulations

Hong Kong’s Financial Services and Treasury Bureau (FSTB) published a policy statement on virtual assets. It is putting together a licensing regime for virtual asset service providers that will align their requirements to those currently applicable to traditional financial institutions. The Securities and Futures Commission will also conduct a public consultation on retail investors’ access to virtual assets under the new regulations, such as through virtual asset exchange traded funds. Also, it said that the government is open to considering property rights for tokenised assets and the legality of smart contracts, so as to provide a solid legal foundation for their development. [Read more at the FSTB]

Cold hard (digital) cash: the economics of central bank digital currency

The European Central Bank (ECB) published an overview of the economics of CBDC. It first outlines the economic forces that shape the rise of digital money and motivate the current debate. It then looks at the implications for monetary policy and financial stability before discussing policy issues and challenges. Finally, it highlight several areas where the understanding of digital money could be improved by further research. [Read more at the ECB]

African Fintech Sector Had One of the Highest Year-on-Year Growth Rates in Funding in 2021

The number of African fintech startups grew from 311 in 2019 to 564 in 2021, and accounted for 61% of the $2.7 billion deployed across Africa in 2021, according to a MasterCard study. While its share of global fintech funding is just over one percent, the continent’s fintech sector still recorded one of the highest year-on-year growth rates globally. Nigeria, which is home to some of the continent’s fintech unicorns, was not only the leading fintech hub in Africa, but across the Middle East and Pakistan. [Read more at MasterCard]

FCA launches discussion on competition impacts of Big Tech on financial services industry

The UK Financial Conduct Authority (FCA) has announced that it plans to examine the issue of regulation of Big Tech’s financial services. The UK regulator is to consider how such regulation of firms such as Apple, Google and Amazon could prevent the potential for them causing harm to the financial services sector. While acknowledging the ability of such companies to bring innovative approaches to financial services, the FCA has voiced concerns that if they build dominant positions this could lead to a “potential exploitation of market power”. [Read more at the FCA]

The CBDC Think Tank is a New York-based technology- and vendor-agnostic digital currency knowledge-sharing hub for staff of central banks, international financial institutions (IFIs) and non-government organizations (NGOs). It runs webinars, workshops, and masterclasses to disseminate knowledge and facilitate communication. It also engages in advisory work, focusing on delivering impact that best aligns with the needs of its clients and the forward progress of human civilization. The CBDC Think Tank welcomes requests from central bank officials for CBDC advisory services.  [click here for more information].

Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]

WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]